Chapter 5 Personal Injury Protection Coverage

• Library: The Law of Automobile Insurance in SC (SCBar) (2015 Ed.)

CHAPTER 5 Personal Injury Protection Coverage Vernon R. Sumwalt, Jr. The Sumwalt Law Firm

South Carolina enacted legislation for personal injury protection — or "PIP" or sometimes "MedPay" — in 1974.¹ PIP was a no-fault coverage that supplemented an insured's liability coverage, and its purpose was "to require medical, surgical, funeral and disability insurance benefits to be provided without regard to fault under motor vehicle policies that provide bodily injury and property damage liability insurance."² PIP included medical, hospital, and disability³ coverage.

PIP coverage underwent a variety of statutory changes until its repeal in 1989.⁴ Since then, PIP has not been a form of mandatory coverage in South Carolina, first by court decision⁵ and then by statute in 2000. PIP coverage has always been contractual in character and does not arise in tort. For these reasons, carriers have much leverage in negotiating the terms of PIP coverage, as long as those terms are consistent with statutory requirements.⁶ For example, PIP coverage is not subject to assignment, subrogation, or setoff.⁷ Moreover, PIP beneficiaries are not required and may not be required to sign a release, assignment, covenant not to sue, or other relinquishment of any rights they may have in order to receive payments under their PIP coverage.⁸

Although attorneys cannot charge contingency fees on PIP recoveries, very limited and fixed fees for negotiating PIP coverage might be permissible.⁹

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Notes:

^[1] The Automobile Reparation Reform Act of 1974, Act No. 1177, 1974 S.C. Acts 2718. See generally, United States District Judge Joseph F. Anderson, Jr., Note, The South Carolina Insurance Reform Act (Part 1): No Fault and...